Company in the news: William Hill
These are tough times for bookmakers, but William Hill is doing all the right things. Phil Oakley explains what that means for the shares.
Being a bookmaker is quite tough these days. Not only is there lots of competition, but the government is looking to clamp down on the industry. To survive and thrive in this environment you have to be good at keeping your customers happy. William Hill (LSE: WMH)looks like it is doing lots of things right.
This week's trading update revealed that the business isdoing very nicely. Sports betting boosted by the WorldCup has been very kind to William Hill.
The profits of the online business have more than doubled compared tolast year, while high-street profits rose by nearly a third. Overseas ventures in Australia and Italy are also doing well. The company now expects profits for 2014 to be at the top endof City analysts' expectations.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
One of the things I like about William Hill is its ability togenerate lots of cash. As a result, net debt fell by nearly aquarter last year and we may see a nice dividend increase.I tipped the shares as a buy' back in July at 335p.
At 363p theyhave performed quite well in a difficult stockmarket. They arenot that expensive on 12 times forecast earnings, but I probablywouldn't chase them now.
Verdict: a solid hold
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
Phil spent 13 years as an investment analyst for both stockbroking and fund management companies.
After graduating with a MSc in International Banking, Economics & Finance from Liverpool Business School in 1996, Phil went to work for BWD Rensburg, a Liverpool based investment manager. In 2001, he joined ABN AMRO as a transport analyst. After a brief spell as a food retail analyst, he spent five years with ABN's very successful UK Smaller Companies team where he covered engineering, transport and support services stocks.
In 2007, Phil joined Halbis Capital Management as a European equities analyst. He began writing for MoneyWeek in 2010.
-
Ocado shares jump 14% after sales surge
The rise in sales comes after Ocado was dumped out of the FTSE 100 in June
By Chris Newlands Published
-
Cash ISA subscriptions surge - but will the chancellor cap ISA benefits in the Budget?
The number of savers using cash ISAs has jumped by 11%, while the popularity of stocks and shares ISAs has declined. Could ISAs be a target in the Autumn Budget?
By Ruth Emery Published
-
William Hill goes all in on PokerStars
Features William Hill is in talks with Canada’s Amaya, owner of PokerStars – the world’s largest online poker business – about a £5bn merger. But is it a good idea?
By Ben Judge Published
-
Shares in focus: Should you take a punt on William Hill?
Features Bookies William Hill is a decent business. But is it worth a flutter? Phil Oakley investigates.
By Phil Oakley Published